Leadership Style, Organisational Climate, Resources and Skills - Research Paper Example

Executive Summary In today’s competitive business environment, organisations seek ways of improving their products or services in order to sustain their competitiveness and survival. Peters and Waterman (1982:8) revealed that the capability of a successful organisation is “...to become more innovative, to be better marketers, to permanently improve labor relations, or to build some other skill which that corporation did not then posses”. The literature review attempts to identify the importance of creativeness and innovativeness within the learning organisation and the factors that influence the organisational creativeness and innovativeness. This researcher summarised the relevant writings from several scholars. Five major factors have been highlighted: Organisational Climate, Organisational Culture, Leadership Style, Resources and Skills, and Structure and Systems of an organisation. Table of Content Pages Executive Summary 5 Table of Content 6 Introduction 7 Literature Review 8 – 16 Methodology 17 Findings 18 – 21 Conclusion 22 – 23 Recommendations 24 – 25 References Appendices Appendix A Appendix B Appendix C Introduction Creativity and innovations are vital ingredients for the success of a learning organisation. The purpose of this research is to identify to what extent creative and innovative practices are present in an organisation. It also wants to critically evaluate how they are stimulated, encouraged, and rewarded. The selected organisation is a human resources outsourcing company that aims to provide a full range of professional human resources services as an effective way of achieving speed and flexibility practices to customers which helps their business stay in competition and achieve success. To assist in this critique, a number of theoretical perspectives and concepts will be considered. Literature Review Definition of Creativity and Innovation Gurteen (1998) defined creativity as the process of generating ideas and creating. Innovation is implementing new knowledge and ideas. Similarly, Goodman (1995) revealed that creativity is the application of imaginative thought resulting in new solutions to problems. Lucas (2005b:93) stated that “...creativity is a subtle and complex process. It involves getting in the right frame of mind, generating ideas or new thinking, absorbing and sensing what is already there, feeding your ideas so they grow, testing them out and reflecting”. The literature review highlights five major organisation factors that enhance creativity and innovation in a working environment. The following explains how organisations use these five major determinants of organisation creativity to identify to what extent creative and innovative practices are present. Factors affecting organisations that enhance creativity in a working environment Organisation climate The climate of an organisation is the atmosphere or mood (Morgan, 1991, as cited in Andriopoulos, 2001). It is also the strongest factor, the perception of work influencing the employees’ attitudes and feelings, involving ideas (Sharman & Johnson, 1997), the frequency of creative behavior and the creative work carried out in an organisation (Amabile et al., 1996). As creativity is needed at every level and dimension within an organisation (Gurteen, 1998), employees are encouraged to participate to generate new ideas to enhance its competitiveness. “Freedom as a core value in stimulating creativity and innovation is manifested in autonomy, empowerment and decision making” (Martins & Terblanche 2003:71).Therefore, autonomy is crucial in a learning organisation which fosters the employees’ creativity. Employees are given freedom in expression and how they approach their work that allows them to enhance their intrinsic motivation and sense of ownership is present (Amabile, 1998). Employees solve problems and make the most of their expertise and their creative thinking skills, to overcome challenge (Amabile, 1998). Employees have freedom and authority to participate in the decision making process. This determines the level of empowerment, which is positively related to the level of creativity and innovation in an organisation (Martins & Terblanche 2003:71) To form a creativity learning climate, it is important that employees understand the vision and mission statements of an organisation. This allows the employees to understand the direction of the organisation and to identify the gaps when comparing situations. They need a clear definition and understand the concepts to enable employees to act creatively and innovatively (Arad et al., 1997, cited in Martins & Terblanche 2003). Kay (1989) also proposed that employees need to understand and accept the core principles and values, which apply to everyone in the organisation (cited in Andriopoulos, 2001). Amabile (1998:81) also stated that “...clearly specified strategic goals often enhance peoples creativity.” The creativity organisational climate should encourage employees in debating ideas (Read, 1996, cited in Martins & Terblanche, 2003). Anderson et al. (1994) also revealed that the employees’ creativity encourages a constructive argument. The organisation encourages minorities to enable them to express their differing creative views stimulating others through the processes of conversion and conflict (West, 1995). Organisational Culture An “Organisational culture refers to a set of basic assumptions that worked so well in the past that they are accepted as valid assumptions within the organisation” (Martins & Terblanche 2003:65). Martins & Terblanche (2003) pointed out that the organisational culture affects the extent to which solutions are encouraged, supported, and implemented. To encourage creativity within their working environments there is a need to develop what Brand (1998) defined as an innovation and supportive culture (as cited in Andriopoulos, 2001). “The Key challenge is to create an organisational culture, which nourishes innovation ways of addressing problems and finding solutions” (Andriopoulos, 2001:835) An organisation is encouraged to create opportunities to openly discuss and have employees learn from mistakes (Ryan, 1996; Tushman and O’Reilly, 1997, as cited in Martins & Terblanche 2003). Open interactions between managers and subordinates are less likely to experience for fear of negative criticism (Amabile, 1979, 1983, cited in Amabile et al.,1996). According to West (1995:74), “...the frequency of interaction of team members will necessarily determine the extent to which they exchange ideas, information, and conflicting views, and will therefore enrich their collective bank of knowledge and creative opportunities.” Job-related anxieties and satisfactions may be discovered through discussions and in the sharing of their own experiences (Anderson et al., 1994). Risk taking enhances the creativity achievement (Amabile, 1998, as cited in Andriopoulos, 2001). Lucas (2005a) also indicated that to become a more creative learner, it is important to take risks. Fear of being wrong limits creativity (Gurteen, 1998). The employees´ fear of failure and punishment will hinder their creativity and innovation (Gurteen, 1998). Hence, according to Amabile (1998), supervision sustains the employees’ passion in performing tasks and further interpreting them “...if she lacks the motivation to do a particular job, she simply wont do it” (Amabile, 1998:79). To safety participate is an important element in a participative environment (Anderson et al., 1994). People are more likely to produce unusual, useful ideas if they are permitted to do so (Parnes, 1964; Parnes & Meadow, 1959, as cited in Amabile et al.1996). Anderson et al. (1994:198) stated that “The high levels of participation are associated with less resistance to change and a greater likelihood of innovation”. If employees are willing to take risks and feel safe while expressing their thoughts, they will be more inspired to participate and foster creativity (Amabile et al., 1996). An examples given by Holt (1984, as cited in Gurteen, 1998:7) “...if we continually try to force a child to do what he is afraid to do, he will become more timid, and will use his brains and energy, not to explore the unknown, but to find ways to avoid the pressures we put on him”. Argyris and Schon (1978, as cited in Pedler et al., 1997) indicated that double loop learning helped to learn how to carry out the ability to tolerate and deal with the inevitable conflicts. Argyris (1994) further contended that double-loop learning “encourages people to examine their own behavior, take personal responsibility, for their own action and inaction, and face the kind of potential threatening or embarrassing information that can produce real change”. Leadership Style The leadership style is one of the main determinants of accessing the organisation´s creativity and innovation. Managers and trainers may act differently to create a climate within their organisation (Sharman & Johnson, 1997). They are advised to be more participative and democratic (Nystrom, 1979, as cited in Andriopoulos, 2001). The DTI & CBI (1994) stated that the characteristics of the innovation´s best practices are leadership by visionary, unlocking the potential of people by good communications, team work and training (as cited in Roffe, 1999). The leader’s vision is a key factor when managing creative individuals (Locke and Kirkpatrick, 1995, as cited in Andriopoulos, 2001). Leaders encourage employees to invest time and resources in generating new possible ideas and skills in managing problems in enhancing creativeness (Roffe, 1999) Amabile and Gryskiewicz (1989, as cited in Andriopoulos, 2001) pointed out that leaders should posses the ability to constitute effective work groups. Cook (1998, as cited in Andriopoulos, 2001) also revealed that leaders must constantly encourage employees to think and act beyond current knowledge. According to Amabile (1998), the exciting and useful ideas often come from different experts and creative thinking styles. Employees hold relatively fixed positions and argue in favour of their views to convince others to change (Gurteen, 1998) “When we interact with people we have an opportunity to learn, to influence, to make things happen” (Gurteen, 1998:7). If team members do not share a team vision, their individual creativity cannot be pooled to produce creative team outcomes (West, 1995). Resources and Skills Organisations often face strategic choices given the resources (Amabile et al., 1996). The allocation of resources to projects is directly related to the projects’ creativity levels (Cohen & Levinthal, 1990, as cited in Amabile et al., 1996). Hence, providing time and resources for employees to consider change and training are needed to turn ideas into implementation (Roffe, 1999). It can also be by broadening the knowledge and expanding the creative-thinking skills (Amabile, 1998). Amabile (1998:21) indicated that “...restriction of resources can dampen creativity”. An effective system to communicate ideas must exist at all levels as well as the procedures for managing innovation (Roffe, 1999). An open information exchange facilitates creative performance (Amabile, 1988, cited in Andriopoulos, 2001). Sharman & Johnson (1997) commented that an idea-handling system can make a good climate in an organisation. There was a bottleneck used in business if there was lack of information (Gurteen, 1998:10). Stacey (1992), (as cited in Roffe, 1999:230) asseverated “The degree to which individual employees and groups are subject to different sets of information and stimuli is reflected in their level of innovation”. In a learning organisation, the implication of a strategic human resources management is important in developing creativity and innovation (Anderson et al., 1994). Especially, in the recruitment, selection, and development, and retention process (Martins & Terblanche 2003). As organisations need people with different kind of skills to succeed in all of the steps within the innovation process, human resources could have insights in developing creativity (Roffe, 1999). Given this, they can match people with jobs and stimulate their intrinsic motivation (Amabile, 1998). Understanding different thinking styles will create a culture supportive of creativity and innovation (Martins & Terblanche, 2003). According to Lucas (2005a:21), “...creativity is a very important part of learning, and learning to be more creative is consequently a key skill for an effective lifelong learning”, thus, employees are encouraged to have on-job and off-job training. Mumford (1997) further interpreted that if an organisation provides employees with a greater capacity to learn, there will be a greater command of his or her personal destiny. As a result, self-initiatives were encouraged. Structure and Systems The decentralisation of an organisation is very important as well as empowerment. Employees are empowered to make decisions (Roffe, 1999). When employees have an influence in the decision-making process, they are more likely to contribute with their creative ideas (West, 1995). A fair supportive evaluation of new ideas is one of the aspects of an organisation for encouragement (Cummungs, 1965; Kanter, 1983, as cited in Amabile et al.1996). Management should be aware and ensure that the methods of rewards and recognitions are appropriate. The range of rewards will stimulate the employees to be more creative and innovative (Tushman and O’Reilly, 1997, as cited in Martins & Terblanche 2003) and presume of their performance attainment and retention (Roffe, 1999). This enables the employee to perform better and become interested in working in the future (Amabile et. al.1986, as cited in Amabile et. al.1996). If creative behavior is rewarded, it will become the general, dominant way of behaving (Arad et al., 1997, as cited in Martins & Terblanche, 2003). Adair (1990) suggested that recognition is a kind of reward, since appreciation may be more important to the individual than money (Roffe, 1999). Methodology Face to face interviews and questionnaires were to collect the information on creativity and innovation within an organisation. The Director and the Human Resources Manager were invited for face to face interview sessions and ten questionnaires were distributed to employees from several departments of an organisation. After conducting the individual interviews and administering the questionnaires, the results were analysed to measure to what extent the creative and innovative practices within a contemporary organisation existed. Findings The interviews and the questionnaires yielded the following information. As an outsourcing company the creativity and innovation are important aspects. Employees are encouraged to use their creative mind to suggest new innovative ideas that help in improving the efficiency and process of their tasks. Eighty percent of the interviewees agreed that they were encouraged to be creative and innovative. As a servicing company they have to comply with the company´s guidelines. The employees had the flexibility in how they decided and how they performed their job. Ninety percent of the interviewees said that they have the autonomy to perform the tasks. The employees have clearly understood the company’s goal and direction for the current year which have been clearly explained as well as their job´s scopes and nature on a yearly basis. Seventy percent of the interviewees admitted they understood the overall goals and direction. The employees were encouraged to debate their ideas and brainstorm with different departments to generate better ideas and solutions. Eighty percent of the interviewees stated that they solved the problems by debating ideas. The employees were welcomed and encouraged to voice their points of view related to their work. Eight out of ten interviewees expressed that they were encouraged to discuss their point of view and give feedback. Seventy percent felt free to speak since the conversations are kept confidential. The employees are encouraged to meet once a week or at anytime that they are available to exchange information. The employees share their information 3 to 4 times a month. Threatened by the current economy crisis, the employees are advised to seek the management´s advice before taking critical risks or making decisions. Although there were no punishments if the employees make wrong decisions, half of the interviewees answered that they were scared of criticism and punishment. However, according to management, the employees are advised to learn from experience. Recommendations will be given to lead employees in the right direction. The Director encouraged the employees to unlock their full potential to achieve as much as they are able to, so that they may feel comfortable. Nearly all of the interviewees reported that they worked under a democratic leadership style. The organisation emphasizes working in team and encouraged them to interact with each other closely to deliver the professional services on behalf of the organisation, in an effective and efficient manner. Eight out of ten interviewees mentioned that they are encouraged to work as team members as well as think and act beyond their current knowledge. The organisation allocates funds based on creativity needs and whether the idea is suitable for the business and the current market. Over half of the interviewees commented that they have had sufficient time and resources to develop creativity. The management and all of the interviewees however pointed out that there are no formal open communication channels within the organisation. Employees have opportunities to communicate during meetings. Employees are encouraged to learn new technologies and guidelines that are related to the business. Over two thirds of the interviewees stated that there are opportunities to learn aspects that will that help in their personal developments. In the human resources area there are criteria of when to hire an employee and their willingness to learn is one of the important ones. The organisation attracts and retains creative talent by building a good environment. The culture and morale of the employees is a comfortable one and the cohesiveness to struggle together is present. The organisation has actively identified the employees’ developmental needs by observing their current work practices. Training is provided as employees need to learn before they can take on their roles and obtain up to date information. Over two thirds of the interviewees have been attending on-the-job and off-the-job training provided by the organisation. The organisation accented on flexibility on their work beyond the guidelines of compliance and only the critical decisions will be made by the director. The organisation encourages the staff to participate in managerial processes and decision making processes. Half of the interviewees agreed to this. Management and all the interviewees indicated that there does not have a fair appraisal system to evaluate the staffs’ contribution in creativity. The degree of achievement is relying on the appraiser’s decision. There are currently no monetary rewarding systems but there are recognitions and team building activities. Eighty percent of interviewees expressed that they have been appreciated by management regarding their contributions. Conclusion In conclusion, comparing the literature review and the findings in the research, it proved to a certain extent, that the creative and innovative practices are present within the organisation. The employees are encouraged to be creative and innovative. They are encouraged to participate and debate ideas, they are given freedom in expression, and they understood the overall organisational vision and mission. The employees are encouraged to discuss and give feedback and they often share information. As there are no punishments if the employees are wrong, they feel free to voice their ideas. The organisation promotes a double loop learning which fosters creativity and innovation. The results indicated that employees are lead by a democratic leadership style which makes them feel comfortable. They are encouraged to interact as a team. Moreover, the organisation has given sufficient time and resources to develop their creativeness. The employees are encouraged to learn new things. In the human resources management, there are mechanisms for developing creativity and innovation during recruitment, selection, development, and retention. Furthermore, the employees are flexible working within the organisation. Decision making is encouraged and it empowers the employees or management. It is clear that these five determinants overlap and interact with one another. There are, however, blocks that hinder the creativity and innovation. The employees are scared of risk taking. Therefore, they are being advised to seek their superior´s approval before making decisions. There are no formal open communication channels. In addition, there is no fair appraisal system and monetary rewarding systems to evaluate and reward the staffs’ contributions in creativity and innovation. Recommendations By identifying the factors which influence the organisational creativity and innovation, there are some blockages that hinder them. To sustain their competitiveness and the survival in today’s competitive business environment, the organisation is advised to remove the barriers of the creativity and innovation. Following are the recommendations. Firstly, as there are no formal open communication channels, “dialogue” is recommended. According to Gurteen (1998), one of the key tools to overcoming these blocks is the open communication. “Dialogue” is a tool that allows us one-on-one and group discussions. The open information exchange system at all levels will facilitate the creativity and the innovation in the employees. If employees access different sets of information, they are stimulated to be more creative and innovative. (Roffe, 1999; Amabile, 1988, cited in Andriopoulos, 2001; Stacey, 1992, cited Roffe, 1999) Secondly, although there is no punishment, employees are scared of risk taking. Employees are scared of losing their job if they are wrong. It is suggested to encourage employees to take risk and be rewarded if they do so (Roffe, 1999). The personnel should be rewarded for risk taking, experimenting and generating ideas (Martins & Terblanche, 2003). It is recommended that a balance be reached in the degree to which risk taking is allowed (Martins & Terblanche, 2003). Finally, there are no fair appraisal systems and monetary rewarding systems to evaluate and reward the staffs’ contributions in creativity and innovations. The organisation is advised to set up a fair, supportive evaluation system. It is a kind of organisational encouragement (Cummungs, 1965; Kanter, 1983, as cited in Amabile et al., 1996). Management by objectives, appraisals, and remuneration policies and exams are all geared towards the improvement of performance (Gurteen, 1998). Quinn (1985, as cited in Roffe, 1999) also identified that the importance of achievement for innovators and observed innovations can provide the employees’ satisfaction of economics. If the creative behavior is rewarded, it will become the general, dominant way of behaving (Arad et al., 1997, as cited in Martins & Terblanche, 2003). REFERENCES Andriopoulos, C. (2001) ‘Determinants of organisational creativity: a literature review’, in Management Decision, 39(10): 834-840. Andriopoulos, C & Lowe, A. (2000) ‘Enhancing organisational creativity: the process of perpetual challenging’, in Management Decision, 38(10): 734-742. Anderson, N, Hardy, G & West, M. 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Developing creativity in the workplace’, in Industrial & Commercial Training, 29(3): 85-87. Sterns, H & Doverspike, D. (1989) ‘Aging and the training and learning process’, in Goldstein, I. & Associates (eds), Training and development in organizations, San Francisco: Jossey-Bass, pp 300-316. West, M. (1995) ‘Creative values and creative visions’, in Ford, C & Gioia D. (eds), Creative action in organizations: Ivory tower visions & real world voices, London: Sage, pp 71-77. APPENDICES APPENDIX A Interview - Conversation with the Director APPENDIX B Interview – Conversation with the Human Resources Manager APPENDIX C Questionnaires - Distributed to the Employees Read More